When businesses restructure, it’s common for employers to confuse redundancy and retrenchment. While the terms sound similar, they carry distinct legal meanings under South African labour law and understanding the difference is critical to avoiding costly mistakes.
A recent Labour Court case, De Weijer v Babcock Africa Services (Pty) Ltd (JS195/21) [2025] ZALCJHB 193 (19 May 2025), provides clear guidance on when a position can be considered redundant and what constitutes a fair Section 189 retrenchment process.
In this article, SEESA Labour Law Consultants break down the case, explain the legal principles, and provide practical guidance for employers on managing redundancy and retrenchment lawfully.
Case Study: De Weijer v Babcock Africa (2025)
During the COVID-19 period, Babcock Africa Services restructured its operations and declared the Property Manager position redundant.
The employee, Mr De Weijer, challenged the retrenchment, arguing that his job “still existed” because other employees were performing many of his tasks.
The Labour Court disagreed. It ruled that a position could be genuinely redundant even if some of the work continued elsewhere in the business.
Key takeaway: The law distinguishes between the position itself and the tasks performed. Even if tasks remain, the position may no longer exist.
When Can a Role Be Redundant? SEESA Labour Lawyer Insights
The Court confirmed that a role can be genuinely redundant even if the work continues elsewhere:
“The task is there, but the position no longer exists.”
This principle has important implications for employers:
- Redundancy relates to the position, not the individual tasks.
- Employers may redistribute duties after a restructure, as long as the retrenchment is fair, consultative, and transparent.
To ensure compliance, the Section 189 retrenchment process under the Labour Relations Act (LRA) must be followed.
Key Criteria for Redundancy
A position is considered redundant if:
- The role is no longer required due to operational changes (e.g., restructuring, technological changes, downsizing).
- The employee’s tasks can be absorbed by other positions without creating a duplicate role.
The retrenchment process is conducted fairly, with consultation and consideration of alternatives.
Following Section 189 Retrenchment Procedures Correctly
In the De Weijer case, the Court praised Babcock for complying with Section 189, noting that the employer:
- Consulted over three months
- Disclosed relevant financial and operational information
- Considered reasonable alternatives, including “bumping” employees into other roles
- Treated affected employees consistently
Because the process was fair and compliant, the retrenchment was upheld.
Tip: A fair retrenchment isn’t about labels; it’s about process and substance.
Learn more: https://www.gov.za/documents/labour-relations-act?utm_source
How to Calculate Severance Pay Under the BCEA (Avoid This Mistake)
Retrenchments are complex and emotionally charged. Employers often overlook key procedural steps due to time or financial Even when retrenchment procedures are fair, severance pay errors can lead to additional costs.
Babcock’s mistake: They calculated severance using only basic salary, excluding benefits such as:
- Housing allowance
- Car allowance
- Medical aid
- Pension contributions
The Court ruled that these benefits are part of BCEA remuneration, resulting in an additional R77,370.57 being owed to the employee.
SEESA Tip: Always include all BCEA-defined benefits when calculating severance pay to avoid disputes and costly back payments.
Also read: https://smelaboursupport.org.za/download/what-is-severance-pay/?utm_source
The Legal Definition: Redundancy vs Retrenchment
The Legal Definition: Redundancy vs Retrenchment
Understanding the difference between these terms is essential:
| Term | Definition | Legal Reference |
| Redundancy | Occurs when a position is no longer required due to operational changes. | Labour Relations Act, Section 189 |
| Retrenchment | The process of terminating an employee because their position is redundant. | Labour Relations Act, Section 189; BCEA |
In short:
- Redundancy = the reason (the position is no longer needed).
- Retrenchment = the action (employee is dismissed following a fair process).
Common Employer Mistakes During Restructuring
Many employers fall into legal pitfalls during restructuring. SEESA advises watching out for these:
- Skipping consultation – Employers must genuinely engage affected employees.
- Misclassifying redundancy – Not every termination due to restructuring is automatically fair.
- Incorrect severance pay – Excluding allowances or benefits.
- Unequal treatment – Failing to apply criteria consistently across employees.
- Poor documentation – Every consultation and decision must be recorded.
Avoiding these mistakes protects the business from unfair dismissal claims.
How SEESA Supports Employers During Retrenchment
SEESA Labour Law Consultants guide employers through every step:
- Legal compliance: Ensuring Section 189 consultation and retrenchment processes are fully compliant.
- Severance calculations: Verifying BCEA remuneration, benefits, and other entitlements.
- Risk management: Minimising the risk of disputes, claims, or additional costs.
- Training and advice: Equipping HR teams with best practices and procedural clarity.
A fair retrenchment isn’t just legal protection — it strengthens trust and transparency with your employees.
The Legal Definition: Redundancy vs Retrenchment
Q1: Is redundancy the same as retrenchment?
A: No. Redundancy refers to the position no longer being required. Retrenchment is the process of dismissing an employee due to redundancy.
Q2: Can an employee be retrenched if their tasks still exist?
A: Yes. The Labour Court confirms that a position can be redundant even if some of the tasks are absorbed elsewhere, provided the process is fair.
Q3: How is severance pay calculated under the BCEA?
A: Severance pay must include all components of remuneration as defined by the BCEA: basic salary, housing allowance, car allowance, medical aid, and pension contributions.
Q4: What steps must employers follow for Section 189 retrenchment?
A: Employers must consult with employees, disclose relevant information, consider alternatives, and treat affected employees consistently. Proper documentation is crucial.
Q5: Can I redistribute duties after retrenchment?
A: Yes, as long as the position itself no longer exists and the process is compliant with the LRA.
Key Takeaways for South African Employers
A position can be redundant even if tasks are redistributed.
- Always follow a fair, transparent Section 189 process.
- Include all BCEA benefits when calculating severance.
- Proper consultation and documentation protect your business from claims.
SEESA Labour Attorneys provide expert guidance to navigate complex retrenchments legally and efficiently.
Key Takeaways for South African Employers
Can you retrench an employee if their tasks still exist?
Yes. As confirmed in De Weijer v Babcock (2025), a position can be genuinely redundant even if the work continues elsewhere — provided the Section 189 process is followed.
Get expert legal support to ensure your process is compliant with the Labour Relations Act (LRA) and the Basic Conditions of Employment Act (BCEA).
Contact SEESA’s Labour Law Consultants today for professional advice on redundancy, retrenchment, and BCEA compliance.